e-business adoption by smes--prerequisites and attitudes of smes in a swedish network

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This article was downloaded by: ["Queen's University Libraries, Kingston"] On: 03 October 2013, At: 08:11 Publisher: Taylor & Francis Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Journal of Organizational Computing and Electronic Commerce Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/hoce20 E-Business Adoption by SMEs-- Prerequisites and Attitudes of SMEs in a Swedish Network Carina Ihlstrom & Malin Nilsson Published online: 22 Jun 2011. To cite this article: Carina Ihlstrom & Malin Nilsson (2003) E-Business Adoption by SMEs--Prerequisites and Attitudes of SMEs in a Swedish Network, Journal of Organizational Computing and Electronic Commerce, 13:3-4, 211-223, DOI: 10.1080/10919392.2003.9681161 To link to this article: http://dx.doi.org/10.1080/10919392.2003.9681161 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content. This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/terms- and-conditions

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Page 1: E-Business Adoption by SMEs--Prerequisites and Attitudes of SMEs in a Swedish Network

This article was downloaded by: ["Queen's University Libraries, Kingston"]On: 03 October 2013, At: 08:11Publisher: Taylor & FrancisInforma Ltd Registered in England and Wales Registered Number: 1072954 Registeredoffice: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

Journal of Organizational Computing andElectronic CommercePublication details, including instructions for authors andsubscription information:http://www.tandfonline.com/loi/hoce20

E-Business Adoption by SMEs--Prerequisites and Attitudes of SMEs in aSwedish NetworkCarina Ihlstrom & Malin NilssonPublished online: 22 Jun 2011.

To cite this article: Carina Ihlstrom & Malin Nilsson (2003) E-Business Adoption by SMEs--Prerequisitesand Attitudes of SMEs in a Swedish Network, Journal of Organizational Computing and ElectronicCommerce, 13:3-4, 211-223, DOI: 10.1080/10919392.2003.9681161

To link to this article: http://dx.doi.org/10.1080/10919392.2003.9681161

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the“Content”) contained in the publications on our platform. However, Taylor & Francis,our agents, and our licensors make no representations or warranties whatsoever as tothe accuracy, completeness, or suitability for any purpose of the Content. Any opinionsand views expressed in this publication are the opinions and views of the authors,and are not the views of or endorsed by Taylor & Francis. The accuracy of the Contentshould not be relied upon and should be independently verified with primary sourcesof information. Taylor and Francis shall not be liable for any losses, actions, claims,proceedings, demands, costs, expenses, damages, and other liabilities whatsoever orhowsoever caused arising directly or indirectly in connection with, in relation to or arisingout of the use of the Content.

This article may be used for research, teaching, and private study purposes. Anysubstantial or systematic reproduction, redistribution, reselling, loan, sub-licensing,systematic supply, or distribution in any form to anyone is expressly forbidden. Terms &Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions

Page 2: E-Business Adoption by SMEs--Prerequisites and Attitudes of SMEs in a Swedish Network

JOURNAL OF ORGANIZATIONAL COMPUTINGAND ELECTRONIC COMMERCE 13(3 & 4), 211–223 (2003)

E-Business Adoption by SMEs—Prerequisites and Attitudes of SMEs

in a Swedish Network

Carina IhlströmViktoria Institute

Göteborg University and School of Information Science, Computer, andElectrical EngineeringHalmstad University

Malin NilssonViktoria Institute

Göteborg University and Department of Computer Science andBusiness Administration

University of Borås

The context for this research is the transformation process of small and medium-sized enterprises (SMEs) from traditional (t-) businesses toward e-businesses and theaccompanying development of the knowledge and competence among employees.SMEs constitute a great part of the Swedish industry and economy. This and the factthat they have special prerequisites concerning human and technology resourcesmakes SMEs an interesting research focus when looking at the transformationprocess toward e-business. The aim of this research is to investigate SMEs with thepurpose of designing, implementing, and evaluating information technology-supported activities that will allow SMEs to approach e-business. This article pres-ents results from parts of an ongoing study, that involves seven SMEs. This study willbe conducted in two main phases: first, informative and preparatory activities andsecond, business transformation and competence development activities. This articlefocuses on the first phase of the study, but an insight in its current status and furtherresearch is given. The underlying prerequisites for SMEs as well as the researchapproach are described. A working model is presented that illustrates stages of matu-rity for taking an enterprise toward e-business. The last sections present the researchdesign, that is, planning, actions, observations, and reflections of the study up untilnow. New actions to take are discussed at the end of this article.

SME, e-business, e-commerce, competence development, implementation, action research, transformation process

Correspondence and requests for reprints should be sent to Carina Ihlström, Viktoria Institute,Göteborg University, P.O. Box 620, S-405 30, Goteborg, Sweden. E-mail: [email protected]

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1. INTRODUCTION

Two aspects of conducting business successfully serve as a background for thisresearch. First, information technology (IT) greatly effects the way corporationsconduct business [1]. This is often referred to as e-business. E-business offersmany possibilities as well as problems that corporations need to be aware of anddeal with. The effective use of IT is likely to be a major determinant of competi-tive advantage. Second, the importance for professionals to learn is widely rec-ognized and it is often the main source for a corporation’s competitive advan-tage, see [2, 3]. The understanding, skills, and experiences of the employeesdetermine the success of the business and competence development and trainingefforts can have a direct effect on practice.

The research presented in this article started out from discussions concerninge-commerce and e-business and the importance of competence development tobe successful in the transformation process toward e-business. Attention wasaimed at large businesses and how they can reach a greater global market withuse of IT. But what can e-commerce and e-business do for small and medium-sized enterprises (SMEs) on a regional basis? A large percentage of Swedishindustry consists of SMEs, and they constitute a large part of the Swedish econ-omy. SMEs are interesting to study in an e-business context because they havespecial prerequisites concerning human and technology resources [4–6]. Hence,the context for this research is the organizational process of transforming SMEsfrom t-businesses toward e-businesses and the accompanying development ofthe knowledge and competence among the employees.

The aim is to investigate SMEs with the purpose of designing, implement-ing, and evaluating IT-supported activities that will allow SMEs to approache-business. The use of IT seems to offer a remedy to some of the problems thatSMEs encounter while approaching e-business. Therefore, the overall researchquestion raised in this study is: How can IT be used to support the transformationprocess of SMEs toward e-business?

This article presents results from parts of an ongoing study that involves sevenSMEs. These SMEs are situated in Halland, a county on the West Coast in Sweden.This region is chosen based on the fact that it has one of the highest rates of SMEsin the country.

The study will be conducted in two main phases: first, informative andpreparatory activities and second, business transformation and competencedevelopment activities. This article focuses on the first phase of the study, but aninsight into its status and further research is given. The underlying prerequisitesfor SMEs as well as the research approach are described. A working model is pre-sented that illustrates stages of maturity for taking a business toward e-business.The last sections present the research design, that is, planning, actions, observa-tions, and reflections of the study up until now.

Kalakota’s definition of e-business, as being a wider term than e-commerce, is used as a foundation throughout this article. “E-business is not just about e-commerce transactions; it’s about redefining old business models, with the aidof technology, to maximize customer value. E-business is the overall strategy, ande-commerce is an extremely important facet of e-business.” ([3], p. 4)

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2. SMALL AND MEDIUM-SIZED ENTERPRISES

There is no general accepted definition of SMEs. Different organizations use dif-ferent definitions. According to The European Parliament, SMEs are enterpriseswith up to 500 employees, net fixed assets of less than ECU 75 million, and a max-imum one-third of their capital controlled by a larger company. The EuropeanParliament divides SMEs into different subgroups based on the number ofemployees, for instance, small undertakings with 10–50 employees and medium-sized undertakings with 50–250 employees [7]. In this article we refer to SMEs assomewhere between small and medium-sized undertakings, that is, 10–99employees.

It is important to appreciate the nature and context of small enterprises andnot treat them as smaller versions of large corporations [8]. SMEs have specialprerequisites concerning human and technology resources [4–6]. They will prob-ably not invest in new technology if they cannot see its immediate use. They alsowill not invest in education if it means that key employees will be missing fromthe operation for a considerable time period or the knowledge gained is not con-crete enough to use in practice. Traditional time-consuming, theoretical, and lecture-oriented courses are not considered to be useful by small enterprises.Alternative educational opportunities are needed.

The growth of e-commerce and buying and selling over digital media has pro-vided SMEs with a new infrastructure in which they can compete on an equalbasis with larger corporations [9]. This fact has revitalized political and economicinterest in the importance of the smaller corporations. The major corporationshave always had the ability to relocate and to move closer to either the customersor the technology. SMEs, on the other hand, have always been more sensitive tomovements in the marketplace [10, 11]. IT allows SMEs to be more adjustable andto move toward more profitable markets. Even though the opportunity has arisenfor SMEs to adopt e-business, very few are actually doing so. The reasons for notadopting e-business varies; barriers discussed are, for example, lack of awareness,uncertainty about the benefits of e-commerce, and that their products are not well-suited for the Internet [4, 6].

The transformation process toward e-business requires knowledge about thetechnology and the ability to use it in new ways. There is a need for training andcompetence development among corporations’ employees to manage this trans-formation. Everyone involved in competence development has some theory oflearning. A learning theory is a systematic and integrated understanding of theprocess whereby people relate to their environment in such a way as to enhancetheir abilities to employ both themselves and their environment effectively.Educators may, or may not, be able to describe their theories in explicit terms,but the ways in which learning activities are designed and conducted revealhow the educator understands the process of learning. In this research there arefour grounding assumptions, that is, the fundamental assumptions underlyingour conception of the teaching–learning process [12]. These ideas are (a) theunderstanding of learning as an individual construction of knowledge, that is,constructivism; (b) insight into how both individual learning and collectivelearning can be supported by the group, that is, collaborative learning; and

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(c) problem-based learning as a model for designing educational activities; and (d) experiential learning to initiate learning activities.

This study will apply the philosophy of thematic modules [13] developed tostructure collaborative educational activities in IT-based environments, and PIER,a methodology for conducting learning activities in groups [14]. Other forms ofactivities supported by IT will be developed and used in this research.

3. RESEARCH APPROACH

This study will be conducted in two main phases, as stated in the introduction.The first phase consists of investigating practice with the purpose of forming thedesign of educational activities and to locate the obstacles for SMEs to transformto e-business. The second phase is the initiation of business transformation activ-ities, which also include educational activities in the network of participatingSMEs.

The action research (AR) approach is appropriate when our intention is to runa project with intervention as an underlying purpose. The purpose is to changethe way of doing business by using IT. This citation by Rapoport is perhaps themost frequently quoted definition of AR [15]. “Action research aims to contributeboth to the practical concerns of people in an immediate problematic situation andto the goals of social science by joint collaboration within a mutually acceptableethical framework.” ([16], p. 499)

AR is a way to collect information about phenomena that would not occurwithout the action. The situation one wants to observe has to be created by theresearcher. From a methodological point of view it is hereby of great importanceto describe and discuss what is going on during the research process. AR is mostof all a learning process, where the most important result comes from experiencesand improved knowledge by the participants [17].

AR combines theory and practice, as well as researchers and practitioners,through change and reflection in a mutually acceptable ethical framework. AR isan iterative process involving researchers and practitioners acting together on aparticular cycle of activities, including problem diagnosis, action intervention,and reflective learning.

Figure 1 illustrates the cyclical process of AR. The contents of the different stepsin this iterative process are shown in Table 1 [18].

In the first phase unstructured interviews with interview guides were used toestablish contact with and make plans for each enterprise [19]. Qualitatively ori-ented interviews will give a general understanding of the SMEs’ organizational

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Figure 1. The AR cycle.

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culture and business practices, attitudes toward employee education, and the useof IT. One of the purposes of these initial interviews was to establish the level ofmaturity of the enterprises regarding e-commerce.

4. STAGES OF MATURITY IN E-COMMERCE

There are a variety of models concerning business maturity of e-commerce. Somedeal with the internal processes of the business and others do not. Grant [20] dealswith internal characteristics such as helping small enterprises to develop success-ful e-commerce strategies through recognizing the maturity of the company look-ing at it from the inside. Burgess and Cooper [21], on the other hand, do notattempt to deal with the internal processes at all. Instead their Internet commerceadoption model divides the potential uses of Web sites into three general cate-gories: promotion, provision, and processing.

When developing an e-commerce system it is important to take into considera-tion all partners involved in the business process. They may be at different levelsof e-commerce readiness or maturity. The maturity of the partners affects whatsystems are feasible to be introduced.

In this article a working model is presented (Figure 2), which is based on [20]five stages of maturity in e-commerce. The stages in Figure 2 illustrate the levelof maturity of the business. Between the levels of maturity there are interven-tions, appropriate to that level, which are aimed at leading on to the next level.Competence development activities are needed to successfully, or more effec-tively, reach the next stage of maturity. The content of the five stages of maturityand the four interventions in Figure 2 are according to Grant [20]. As stated, thisis a working model and, as the name implies, the model will be redefined duringour research. At this point we cannot be too precise about what kind of actionswould be appropriate at the different interventions, since that is what we arestudying.

E-BUSINESS ADOPTION BY SMES 215

Table 1The Content of the Steps in the AR Cycle

The Steps in Figure 1 The Content of the Steps

Phase 1 Plan Initial reflection on the situation, planning an experience oraction, reconnaissance

Phase 2 Act Planning for improvement, implementing the strategic plan,involves the consideration of alternative courses of action to attain the improvement or solve the problem identified

Observe Enacting the plan and observing how it works, including anevaluation of the action by appropriate technique; theaction taking stage involves the selection and realization of one of the courses of action considered in the previous stage

Reflect Reflecting on the results of the evaluation and on the wholeaction research process; the evaluating stage involves the study of the outcomes of the selected course of action

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Immaturity: At this stage there is a noticeable lack of awareness of e-commerce.The enterprises that are at this level are not aware of the potentials of theInternet in general.

Intervention: The first intervention is to raise the basic awareness of the busi-ness toward the potential of the Internet and e-commerce. The enterpriseneeds to get connected and experience the Internet. Encouragement might beneeded.

On the Internet: At this stage the enterprises are using the Internet to someextent, for example, using e-mail, using the Web to search and gather infor-mation, and a simple Web site might exist. This Web site could, for instance,be an online brochure, without any interactivity. The people at this stage arefamiliar with Internet as users.

Intervention: The second intervention is to raise the business awareness further.The enterprise is ready to be introduced to feasible models of e-commerce.The model, chosen by the enterprise, needs to be analyzed from different per-spectives, such as cost and benefits. Professional advisors need to make surethat the enterprise understands all of the issues involved.

E-commerce provisional strategy decided: This stage is about having a definitebusiness plan for e-commerce, but not being ready to implement it. Theobstacles at this stage may be many and varied. There are a number of rea-sons why the enterprise is not ready to implement at this stage; for instance,the technology may be lacking, the costs may be too high but expected to fall,and there may be a lack of expertise within the enterprise.

Intervention: The third intervention depends on the obstacles identified. If thereis a lack of expertise in the enterprise, competence development activities areneeded. The business processes might be insufficiently well-formulated,which makes it appropriate for business systems analysis.

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Figure 2. Stages of maturity in e-commerce.

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Ready to implement: At this stage the enterprise is ready for implementation ofan e-commerce strategy. The business plan and expectations are clear; thereare no impossible obstacles to overcome. The needed partners or profession-al support have been identified.

Intervention: The fourth intervention is to implement the plans. The nature ofe-commerce makes it difficult for the plans to be as predicted. Hence, therewill be a continuing need for supervision and occasional advice from Internetprofessionals.

Integrated and effective e-commerce: The fully mature e-commerce businesswill have IT integrated with their business processes and information flows.

5. RESEARCH DESIGN

The AR cycle in Figure 1 will be used at different levels throughout this study. Itcan be used to describe and structure all research being done in this study as wellas parts of the study. The AR cycle will be applied to the first phase in the study,that is, informative and preparatory activities. In this section the first threesteps—plan, act, and observe—of the AR cycle are applied. The following twosteps—reflect and new actions—are applied as conclusion and further research.

5.1 Plan

Initially, the focus of the study was on establishing a network consisting of 10committed SMEs. The network of SMEs was initiated in order to gain positiveeffects for the individual SME. The interaction within the network may stimulatethe learning process of the SMEs by exchanging experiences with each other.There also exists an opportunity for SMEs in a regional setting to make a jointapplication for technical equipment. The SMEs were gathered from three alreadyestablished networks by the following criteria and, of course, by their interest inparticipating. They are used to working with researchers from universities andhave all seen positive effects as an outcome. The process of finding SMEs hastaken place in collaboration with organizations in the region, for instance, Smelinkand The Center for Working Life Research and Development at HalmstadUniversity.

One criterion for enterprises to be a part of the study is the size of the enterpriseregarding the number of employees. In the introduction we stated that SMEs inthis study are enterprises with 10–99 employees. Another criterion for selectionwas that they should not be completely immature regarding the use of theInternet. They should at least have e-mail functions and preferably a static Website, that is, enterprises that can be placed on the second level of maturity in Figure 2. Yet another criterion was that they should all be manufacturers but notcompetitors. A network with competitors would include another kind of com-plexity that would stress issues of which this research has no intention to focus.

An intermediate goal is to assist three of the SMEs toward the fifth stage in themodel, that is, integrated and effective e-commerce. In phase two of the study

E-BUSINESS ADOPTION BY SMES 217

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these SMEs will act as references for the others. Not all SMEs have the intentionof reaching the top of the stairway; there is a mixture of intentions of the partici-pating SMEs.

A trip to California is planned during the fall for the participating SMEs. The purpose of this event is to visit a network of SMEs that are involved in to e-commerce and attend seminars about e-business; this in order to gain experi-ences within this area.

5.2 Act

The very first meeting with potential SMEs for this study was held on April 12,2000. The meeting was held at Halmstad University in conjunction with a largeseminar, with broadband as a topic. At this meeting each of the participatingenterprises expressed their interests in being a part of this study. Different activi-ties to be performed in the study were discussed. Appointments were scheduledfor the researchers to visit each enterprise for initial interviews. The results fromthese field studies, with unstructured interviews, are presented in the last part ofthis article.

Seminars and workshop activities were carried out during the fall of 2000. Theseminar activities started with a seminar that gave the SMEs a general under-standing of the topic of e-commerce. Seminars 2 and 3 were about logistics andlaw issues. The topics of the seminars were a result of the expressed interests ofthe participating SMEs.

An embryo to a Web portal, http://www.smebiz.nu, has been developed andpublished. The purpose of this portal is to let the SMEs interact with each other byexchanging knowledge and experiences. All information regarding the study andrelated topics will be published and available at this site. The study will be pre-sented and promoted at the portal of the county of Halland, http://www.halland.se. The portal will hereby serve as a meeting place for enterprises in theregion.

At one of the committed SMEs there is currently an ongoing investigationabout their e-business strategy and at another the possibilities for a more devel-oped customer-oriented Web site are researched.

Interviews have been conducted and the gathered empirical data are presentedin the following section.

5.3 Observe

We have used qualitative interviews to collect the following material. From the 10potential SMEs, there are 7 who are committed to the study. Those who droppedout could not be fully committed and will follow the progress of the study from adistance through the portal. Each enterprise has been visited and interviews havebeen conducted with one to two respondents. The recorded interviews lastedapproximately 60–90 min. Of the seven participating SMEs all manufacturers par-ticipated except one, the wholesaler who is italicized in Table 2. In this section a

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brief description of the SMEs is given both in textual and tabular format. Attitudestoward e-business are captured and somewhat categorized.

A. This enterprise manufactures tailor-made kitchen and bathroom cabinetsto retailers (business-to-business, B2B) and to end-consumers (business-to-consumer, B2C). There is currently a static Web site with information about theirproducts and how they can be reached. The Web site is developed in an amateurmanner and is seldom updated, but a new site is under construction by a profes-sional Web designer. They wish to have parts of the site protected by password.At these protected pages the customers will be able to modify existing drawingsand make comments about their special requirements. Where in the line of pro-duction the products are will also be available.

B. This enterprise manufactures noncorrosive products, mainly marine, toretailers and shipyards. They have chosen to remove their Web site. They haveplans to use the digital media to make the communication with their suppliersmore effective.

C. This enterprise manufactures tailor-made doors and garage doors. Theyuse a Web site for marketing reasons only, mainly because of lack of awareness.They are interested in the possibility of trading some second-rate products, due tocalculation errors and poor raw material, through their Web site.

D. This enterprise produces a variety of biocides. Their product range is stan-dardized and reaches a global market. There is a static Web site, written inEnglish, with the enterprise’s well-designed profile, in line with their overalladvertisement material. Their aim is to offer part of their production online for theSwedish market in order to increase clientele.

E. This enterprise manufactures detail products with extreme precision witha short production range; for instance, operating instruments and parts ofweapons. Their Web site is currently the only marketing channel they use. Theywant to use the Web site for more tasks, such as receiving orders and sendingblueprints.

F. This enterprise, manufacturers of metal roofing, is located both in Swedenand England and is expanding in Scandinavia. There is a well-designed Web site,only available in English. Their plans are to develop the Web site to become a com-munication platform where they can interact with their customers and make theirbusiness routines more effective.

E-BUSINESS ADOPTION BY SMES 219

Table 2The Participating SMEs in the Study

SME Established In Size (No. Empl.) Line of Business Level of Maturity

A 1944 26 Kitchen cabinets 2B 1972 40 Noncorrosive marine products 2C 1962 17 Special made doors 2D 1982 36 Biocides, pest control products 2E 1987 18 Fine mechanics 2F 1987 34 Metal roofing 2G 1997 1 Oral care products 2

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G. This is a wholesaler, who imports oral care products from the UnitedStates and sells the products to large department stores in Sweden. No Web siteexists at the moment, but there are plans to reach the end-consumers via theInternet.

The following quotations represent attitudes toward e-business among the SMEsin this study. Each quotation is followed by an explanatory discussion.

“We would really like to try this e-commerce trend but we don’t really know whatwe can use it for!”

A majority of the SMEs are eager to raise their awareness of e-business and arecurious about the possibilities with e-business. Most of them view their Web sitesas a marketing channel, but some have an extended view and look upon Web sitesas being communication platforms where interaction with customers can takeplace. They want to use the Web to make, for instance, their routines for ordersmore efficient. They have heard a lot about e-business and e-commerce, whichmakes them curious to know more. A minority of the SMEs question their suit-ability for adopting e-business. Because there is skepticism among them they pur-sue a wait-and-see policy.

“Can we stop visitors from visiting our Web site?”

The quotation above is expressed by one of the two enterprises who do not wishto expand their clientele. They believe that a Web site is useful for their presentcustomers, but want to exclude others. Their main concern has been how to dealwith this. One of the SMEs removed their Web site, since a consequence of beingon the Web attracted end-consumers of no interest to them. This is in contrast tosome of the others that think of the Web as an opportunity to reach a greater mar-ket, that is, increase their clientele both domestically and internationally.

“Can’t imagine that anyone can feel close to its customers if correspondence is madeover the Internet!”

Some of the SMEs shared the underlying emotion in the previous quotation.They felt it important for the enterprise to retain the personal contacts via tele-phone. One of them is of the opinion that there will be a loss of personal touchin the relationship with their customers and underlines that the personal rela-tionship is invaluable. They are of the belief that chats about family matters, andso forth, are impossible to achieve via the Internet. On the contrary, many are ofthe opinion that they add customer value when they can answer requests at moresuitable times; for example, avoiding bad timing. E-mail is, according to most ofthe respondents, equivalent to the telephone regarding exchange of informalmatters.

“We cannot put our products on the Web, it’s easier for those who have standardizedproducts.”

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Two of the SMEs expressed concerns about e-commerce and reaching their end-consumers regarding the aspect of becoming competitors to their own retailers.Their wishes are not to lose retailers, but they are aware of the risk involved. Oneof the SMEs tried to reach an agreement with retailers about the pricing policy, forexample, to charge a higher price to the end-consumer.

6. CONCLUSION

In this section reflections about the previous stages in the AR cycle are presented,mainly reflections upon the interviews. A conclusion that can be drawn is that allthe respondents express that in e-business, e-commerce is something they shouldconsider adopting even though they are uncertain about what suits them or if it issuitable at all. They feel pressured, which is surprising considering the absence ofany external pressure either from suppliers or customers.

That SMEs have special prerequisites regarding technical and human resourceswas confirmed by the interviews. These prerequisites are currently being investi-gated in greater detail, but here are some implications found at an early stage: lackof knowledge and awareness within the enterprise; for instance, one person mayhave skills to accomplish some matters but are assigned to others and lack thetechnical resources such as an appropriate Internet connection due to localization.The established network seems to be a good way to approach these issues.

All the seminar activities are recorded on videotape and this material is cur-rently being evaluated. Preliminary results tell that the accomplished seminarsresulted in positive effects for the participants. Experiences were exchanged asexpected and planned within the network. Continuations of seminar activitieswere an expressed request by the SMEs.

The working model, Figure 2, presented in previous sections, needs to be rede-fined in order to function properly in this study. Problems encountered in theprocess of placing the SMEs on the correct level were not manageable in a satis-factory manner.

7. FURTHER RESEARCH

This article describes an iterative research process and has been presented accord-ing to the AR cycle components. New actions are the stage before a new cyclebegins, therefore, upcoming actions are described in this section.

The working model presented in this article will be redefined and evenredesigned. The model will consist of the identified obstacles and proposed solu-tions to the problems in the transformation process of SMEs toward e-business. Itwill also be put into an estimated time frame. From the evaluation of this AR cyclea need for a more detailed scale has been identified.

Evaluation of the early seminar activities will be conducted and new learningactivities will be designed to increase the understanding of adopting e-business.The videotapes from the early seminars will be edited and published on the Webportal. Further workshops and seminars will be arranged and other forms of

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network activities are encouraged. The Web portal is meant to increase the inter-activity among the SMEs in the study as well as other corporations in the region.Actions will be taken to form part of the portal in the direction toward an educa-tional site. Educational activities on the portal will meet the needs of SMEs forcompetence development considering aspects such as the course of the scheduleto be decided by the individual SME, for it to be less time consuming, with noneed for traveling, and so forth.

New interviews are going to be conducted with all of the SMEs in the study. Aninteresting aspect to review is what effect the time past and the accomplished sem-inars have had on the maturity of SMEs regarding e-commerce.

Business transformation projects with three SMEs, the reference enterprises,will be initiated. How this will be done depends on each separate enterprise sincethey all have different goals with their participation in this study. Some SMEswant a total e-commerce solution and some want to find more efficient ways tohandle their administrative work.

The expected results of this study are, first of all, positive effects in the partici-pating SMEs, but also more general knowledge about competence developmentand e-business in SMEs.

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[4] OECD, “SMEs and electronic commerce,” Ministerial Conference on Electronic Commerce, Ottawa,Canada, Oct. 7–9, 1998.

[5] R. Rothwell, “External networking and innovation in small and medium-sized manufacturingfirms in Europe,” in Technovation vol. 11, (no. 2). Amsterdam: Elsevier Science, p. 96.

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[14] C. Hardless, M. Nilsson, and U. Nulden (2001). Copernicus—Experiencing a failing project forreflection and learning. Accepted in Management Learning.

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